Contract termination: NPA shops for company to replace Intels

NPA MD Hadiza Bala Usman

Following the termination of contract of boats pilotage monitoring and supervision  which the Nigerian Ports Authority (NPA) had with Intels Nigeria Limited, the Managing Director of the Nigerian Ports Authority (NPA), Hadiza Bala Usman said the organisation has already begun shopping for another company that will take up the job.

The NPA boss however assured that the termination would not lead to job losses as all the staff would be absolved by NPA. According to her, Intels has three months to quit the port  as result of the termination of Intels contract.

Usman stated this in Lagos when she spoke with the media on topical issues in the maritime sector adding that once Intels is declared redundant, the company that will take up the contract from it will definitely absorb the workers.

According to her, the contract remained terminated as directed by government through a letter dated September 27, 2017 and addressed to the office of the Managing Director of the NPA by the Attorney General of the Federation (AGF) and Minister of Justice, Mallam Abubakar Malami.

She said that Intels had remained obstinate and had refused to abide by the law of the country guiding such an agreement adding that for the fact that no company is above the law of Nigeria and that the disputed revenue belonged to the Federal Government, NPA reserved the right to cancel the agreement since Intels was not complying.

It would be recalled that Malami in his letter to NPA had said that the agreement, which allowed Intels to receive revenue on behalf of NPA for 17 years, violated the Nigerian Constitution, as it ran foul of the rules guiding the implementation of the Treasury Single Account (TSA) policy of government.

Usman disclosed that she had raised letters and held several meetings with Intels management with a view to making it comply with the Federal Government’s directive on the Treasury Single Account (TSA) since she assumed office 15 months ago adding that the company had however insisted not to make payment to NPA until it deducted 28 percent commission and other costs.

”NPA had insisited that a TSA account has been opened where all revenue relating to the contract must be paid and that at the end of the month, there will be reconciliation of accounts but Intels had bluntly refused to pay into the Account until it deducts 28 per cent commission and other costs.”, she said.

Usman explained that all further attempts by the NPA to get the company to comply with the payment directive was met with various excuses saying that the Authority thus had no other choice than to terminate the contract in order to maintain a level playing field, for the purpose of due diligence and obedience to the constitution of Nigeria.

The contract had been signed for the purpose of ensuring the safety of ships’ passage within Nigeria’s seaports. Thus the NPA, through Intels as its agent, provided pilotage services to guide ships into and out of the ports. Pilotage is a usual practice in the maritime industry and It is compulsory for all ships of 35 metres overall length or greater unless a valid Pilotage Exemption Certificate is held by the ship’s master.

In return for the service, ship owners/companies are required to pay a pilotage fee, which Intels collects on NPA’s behalf and retains 28 percent of the revenue as commission for the services rendered.

Drawing the attention of Bala-Usman to the illegality of the agreement, Malami had made it expressly clear that the agreement violates Sections 80(1) and 162(1) and (10) of the constitution, and wondered that the parties – NPA and Intels – did not avert their minds to the relevant provisions when they were negotiating the agreement in 2010.

Section 80(1) of the constitution states: “All revenues or other moneys raised or received by the Federation (not being revenues or other moneys payable under this Constitution or any Act of the National Assembly into any other public fund of the Federation established for a specific purpose) shall be paid into and form one Consolidated Revenue Fund of the Federation.”

Section 162(1) states: “The Federation shall maintain a special account to be called ‘the Federation Account’ into which shall be paid all revenues collected by the Government of the Federation, except the proceeds from the personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja.”

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